Apr 01, 2011Many companies don't want to be on the bleeding edge when it comes to adopting a new technology such as radio frequency identification. They would rather be fast followers and let early adopters assume all the risks. But being a fast follower requires knowing who is innovating, and how. When companies start selling goods or services on the Web, their competitors can see what they're doing.
That's not the case with RFID deployments, because many companies use the technology internally or within the supply chain. This creates two challenges for fast followers: First, they need to figure out which of their competitors are adopting RFID, and second, they need to learn how to deploy the technology to improve their own business processes.
In the retail apparel sector, only a few early adopters, including American Apparel and Wal-Mart in the United Sates and Charles Vögele in Europe, have announced RFID deployments. That has led some retailers to assume not much is happening. But there's a lot more going on than is being reported. RFID Journal editors and reporters hear off-the-record about many other initiatives, and based on discussions with tag manufacturers and end users, we estimate as many as one billion apparel items will carry RFID tags in 2011.
What's more, some insiders say as many as another billion RFID tags will be consumed this year for tracking assets and work-in-process, as well as for other applications. It seems some early adopters in manufacturing, logistics, waste management and other industries also are keeping mum on their deployments, as they steal a march on their competition.
So by the time fast followers decide to adopt RFID, they may have fallen far behind their competitors. While early adopters push RFID deeper into their operations, cutting costs and improving execution, fast followers need to get up to speed on the technology. Improvements in RFID hardware and software are making the technology easier and faster to deploy, but lingering issues must be addressed. It's not as simple as hiring a college kid to write some code for a new Web site.
Fast followers can benefit from published case studies, industry guidelines and white papers. And some companies are speaking publicly about their initiatives at RFID events or participating in virtual events and webinars. But fast followers still need to apply this shared knowledge to their own operations.
Last July, Wal-Mart announced it was RFID-tagging complex inventory, such as men's jeans, to improve inventory accuracy and on-shelf availability. At that time, the retailer had been working with suppliers for eight months to tag goods at the point of manufacture, to achieve cost savings and the ability to receive goods into inventory quickly and accurately. A fast follower seeking to use RFID to achieve similar benefits might take two years to implement such a solution. During that time, Wal-Mart likely will expand its item-level initiative to other product categories. Similarly, auto maker Daimler began using RFID in 2006, and has been studying and adding new applications as part of its plan to apply RFID to improve processes throughout its global operations. A competitor seeking to offer the best car at the lowest price might take two to three years to catch up.
RFID won't provide a permanent competitive advantage, because the pace of innovation usually slows as a new technology matures. Ten years ago, a bank offering online services might have taken market share from competitors that still required customers to go to a branch office to manage their accounts, but today, just about all banks provide online services. Similarly, a decade from now, RFID will be integrated into every company's operations. But that means fast followers could lag by two years or more for the next 10 years.